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Analyse how internal and/or external sources of change may create reasons for international business expansion. - HSC - SSCE Business Studies - Question 27 - 2011 - Paper 1
Question 27
Analyse how internal and/or external sources of change may create reasons for international business expansion.
Worked Solution & Example Answer:Analyse how internal and/or external sources of change may create reasons for international business expansion. - HSC - SSCE Business Studies - Question 27 - 2011 - Paper 1
Step 1
Internal Sources of Change
Answer
Internal sources of change refer to factors within an organization that can influence its operational dynamics. For example, innovation in product development can lead a business to explore international markets to introduce new offerings. As companies invest in research and development, they may identify unique products or services that are not available in foreign markets, prompting international expansion. Furthermore, changes in company leadership or organizational restructuring can instigate new global strategies, further encouraging businesses to seek growth opportunities abroad.
Step 2
External Sources of Change
Answer
External sources of change include economic trends, competitive pressures, and regulatory changes in foreign markets. For instance, globalization has enabled businesses to access new customer bases as competition intensifies locally. This external pressure can drive companies to expand internationally to maintain competitive advantage. Additionally, fluctuations in currency exchange rates may create opportunities for businesses to capitalize on more favorable financial conditions abroad.
Step 3
Technological Advancements as Change Drivers
Answer
Technological advancements can also serve as a significant external catalyst for international business expansion. Digital technologies have revolutionized how companies operate, allowing for the efficient management of cross-border operations. The use of e-commerce platforms enables businesses to reach international customers with ease, reducing the need for physical presence and mitigating entry barriers into new markets.
Step 4
Market Demand and Cultural Trends
Answer
Changes in market demand, fueled by cultural shifts and consumer preferences, can spur international expansion as well. For example, a growing awareness of sustainable products can lead a company to explore new markets where eco-friendly offerings are in demand. Adapting to cultural preferences in different regions can motivate businesses to tailor their products and marketing strategies for international audiences.